Under Armour 2015 Annual Report Download - page 77

Included in selling, general and administrative expense was rent expense of $83.0 million, $59.0 million and
$41.8 million for the years ended December 31, 2015, 2014 and 2013, respectively, under non-cancelable
operating lease agreements. Included in these amounts was contingent rent expense of $11.0 million, $11.0
million and $7.8 million for the years ended December 31, 2015, 2014 and 2013, respectively.
Sports Marketing and Other Commitments
Within the normal course of business, the Company enters into contractual commitments in order to
promote the Company’s brand and products. These commitments include sponsorship agreements with teams and
athletes on the collegiate and professional levels, official supplier agreements, athletic event sponsorships and
other marketing commitments. The following is a schedule of the Company’s future minimum payments under
its sponsorship and other marketing agreements as of December 31, 2015, as well as significant sponsorship and
other marketing agreements entered into during the period after December 31, 2015 through the date of this
report:
(In thousands)
2016 $126,488
2017 138,607
2018 137,591
2019 98,486
2020 67,997
2021 and thereafter 289,374
Total future minimum sponsorship and other payments $858,543
The amounts listed above are the minimum compensation obligations and guaranteed royalty fees required
to be paid under the Company’s sponsorship and other marketing agreements. The amounts listed above do not
include additional performance incentives and product supply obligations provided under certain agreements. It
is not possible to determine how much the Company will spend on product supply obligations on an annual basis
as contracts generally do not stipulate specific cash amounts to be spent on products. The amount of product
provided to the sponsorships depends on many factors including general playing conditions, the number of
sporting events in which they participate and the Company’s decisions regarding product and marketing
initiatives. In addition, the costs to design, develop, source and purchase the products furnished to the endorsers
are incurred over a period of time and are not necessarily tracked separately from similar costs incurred for
products sold to customers.
Other
In connection with various contracts and agreements, the Company has agreed to indemnify counterparties
against certain third party claims relating to the infringement of intellectual property rights and other items.
Generally, such indemnification obligations do not apply in situations in which the counterparties are grossly
negligent, engage in willful misconduct, or act in bad faith. Based on the Company’s historical experience and
the estimated probability of future loss, the Company has determined that the fair value of such indemnifications
is not material to its consolidated financial position or results of operations.
From time to time, the Company is involved in litigation and other proceedings, including matters related to
commercial and intellectual property disputes, as well as trade, regulatory and other claims related to its business.
The Company believes that all current proceedings are routine in nature and incidental to the conduct of its
business, and that the ultimate resolution of any such proceedings will not have a material adverse effect on its
consolidated financial position, results of operations or cash flows.
Following the Company’s announcement of the creation of a new class of common stock, referred to as the
Class C common stock, par value $0.0003 1/3 per share, four purported class action lawsuits were brought
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